Rewind to this time last year and Silicon Valley-based, ASX-listed HR tech company 1-Page was being trumpeted as the most successful backdoor listed stock of the year – an inspiration to many other companies taking the same route to the public market.

At its 20¢ issue price the company had a market capitalisation of just over $24 million, but at it's peak, the company reached a valuation of $726.2 million, despite only having $US72,000 revenue in the 2013 full year, preceding its October 2014 float.

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"That's the short answer. The long answer is I looked at the stock many times when it was racing ahead and I could not understand it," he says.

"It perplexed me. It just did not make any sense."

The only rationale Mr Southwell-Keely could come up with for what had caused the sharp rise, was that it had acted like a "self-fulfilling prophecy".

"A certain bunch of people think it's a great story and then that attracts more interest and more interest and so on," he says.

Airtree Ventures managing partner Craig Blair said the 1-Page story was a window into the "wild speculation" that happens in markets.
Nic Walker

"I believe the management are also very good presenters, so perhaps you've got a situation where this positive momentum is reinforced with some professional presentations."

Illogical numbers

Chief executive Joanna Riley said she had not expected 1-Page's rapid rise or fall in share price.

"The beauty of being publicly listed is that the market determines the price...In hindsight it's easy for market commentators to say that $5 was high. When Tesla was valued at $10bn and loss making was it over valued? It is now valued at almost $30 billion," she said.

"We're not comparing ourselves to Tesla but … it is clear the market is bearish on the tech sector globally and as a result most tech stocks have fallen at least 50 per cent with no change to underlying operations."

Since listing, 1-Page has managed to grow its revenue substantially from its low base, but not enough to have justified its former $726 million price tag.

In the 2015 full year to January 31, the company's revenue grew 221 per cent to $412,629, up from $130,214 in the previous corresponding period. At the same time it recorded a $14.3 million loss, up from $11.3 million.

AirTree Ventures managing partner Craig Blair said the 1-Page story was a window into the "wild speculation" that happens in markets.

"There is no obvious link between the share price to revenue or other metrics," he said.

"This was the market getting very excited about a story. This is a US company and California alone has about $46 billion in venture capital and hundreds of firms trying to unearth amazing tech companies, so a company like this listing on the ASX has already passed a lot of gatekeepers."

The big question mark hanging over the company now is whether or not its current share price of about 45¢ and a market capitalisation of $69.9 million represents fair value. The analysts were divided.

The company has some fundamentals in its favour including a strong technology platform, a number of big name customers including Red Bull, BuzzFeed and First Republic Bank and enough cash in the bank and investments to see it through for some time.

Attractive qualities

TMT Analytics managing director Marc Kennis said 1-Page still had many attractive qualities.

"It's about runway, management quality and the addressable market. Despite its declines in share price, for 1-Page the addressable market is still very attractive," he said.

"Looking at its technology, it's also a strong point to have something differentiating … and from a cash position you need to be able to ride out some storms … and 1-Page has that."

The stock's performance on the market has been volatile recently. On Thursday it was pushed up 12 per cent to 50¢, before it fell back to 42.5¢ on Friday.

Some investors will have grown tired of waiting for the company to produce higher revenue numbers and one of the big question marks over the business is its high cash burn. Per month it spends about $US1.3 million.

"Over the last two periods it became apparent that cash conversion was taking longer than everyone wanted and a lot of air came out of it," Mr Kennis said.

"Looking at where [the share price] has been, this is a lot more realistic, but before the company starts to convert the cash, there's still some risk with where it will go."

Reducing spending

The company has recognised this as a problem and said in a statement to the ASX in late May that it intended to reel in monthly spending through "prudent cash management" and said it planned to reduce its monthly operating costs to below $US1 million.

Mr Kennis said that the market's treatment of 1-Page was not singular and that most small cap tech stocks had been hit.

"Looking at the small cap tech space in general over the last six months, a lot of air has come out of it," he said. "People are turning around and putting more thoughts into what actually makes a good tech company."

Ms Riley said the company was going to appoint a head of investor relations that would be available during Australian trading hours, to help maintain investor confidence in the company.

Day-to-day Ms Riley said she was not concerned with the share price, instead focused on releasing the next product upgrade and winning new clients.

"We are focused on building long term shareholder value, so we can't really comment on the 'value' of our shares at a given moment in a volatile market," she said.

"No doubt an early growth tech company with small revenue is in for a roller coaster ride."